To increase authorized capital, a company typically needs to go through a formal process, which may vary depending on the jurisdiction and the company's legal structure. Here are some general steps that are often involved:
Review the Articles of Incorporation/Association: The authorized capital is determined and stated in the company's Articles of Incorporation or Articles of Association. These documents outline the company's structure, purpose, and capital details. Review these documents to understand the existing authorized capital and any provisions related to increasing it.
Shareholders' Meeting: Call for a shareholders' meeting in accordance with the company's bylaws or applicable laws. Provide notice of the meeting to all shareholders, including the proposed resolution to increase authorized capital. The notice should specify the purpose of the meeting and the proposed changes.
Shareholders' Approval: At the shareholders' meeting, present the proposal to increase authorized capital and explain the reasons behind it. Shareholders will then vote on the resolution. The specific majority required for the resolution to pass will depend on the company's bylaws and applicable laws.
Amendment to Articles of Incorporation/Association: If the resolution is approved, prepare the necessary documentation to amend the company's Articles of Incorporation or Articles of Association. This typically involves drafting a resolution that reflects the approved changes to authorized capital.
